IRS checks on
Lindseys use of
Two estate managers say theyBy Rick Daysog
compiled data on work they did on
the trustee's Punaluu home
The Internal Revenue Service is examining Bishop Estate trustee Lokelani Lindsey's use of estate staffers to work on her beach-front home in Punaluu.
In testimony in the trial to remove Lindsey from the estate's board yesterday, two Bishop Estate managers said they compiled information about their work on Lindsey's home for the IRS, which is auditing operations of the multibillion-dollar charitable trust.
Alika Neves, an estate land manager, said he spent a total of 150 hours helping Lindsey obtain state shoreline certifications and city land use approvals for her Punaluu home during a 13-month period between 1993 and 1995.
Paul Cathcart, director of the estate's land holdings in central and east Honolulu region, said he spent about 25 hours of his work time on Lindsey's home during the same period.
IRS audit started in 1996Since 1996, the IRS has been conducting an extensive audit of the trust's operations, which include an examination of the estate's tax-exempt status, allegations of conflicts of interest involving trustees, and trustees' six-figure annual compensation.
The soon-to-be completed audit also is taking a close look at trustee perks and their personal use of estate assets and employees.
Trustees could face severe penalties if the IRS finds that they benefited at the expense of the estate.
Michael Green, Lindsey's attorney, yesterday said he not aware of the IRS's inquiries about Lindsey's home. He said that Lindsey repaid the estate for the work conducted by Neves and Cathcart last year after questions were raised in the local media.
The land managers' testimony is in response to a key allegation in Bishop Estate trustees Gerard Jervis's and Oswald Stender's petition to remove Lindsey from the estate's five-member board.
The two trustees have charged that Lindsey ordered estate staffers to do the work after she learned that it would cost her $12,000 to hire an outside consultant. They say that she initially refused to reimburse the estate before making a partial payment in October 1997.
Called Lindsey 'vindictive'Cathcart noted that he consulted with his supervisor at the time, former asset manager Anthony Sereno, about the work on Lindsey's home. Sereno, who died in 1994, told him continue the work because Sereno felt that Lindsey was a "vindictive person" who could hurt the asset management department, Cathcart said.
The Lindsey removal case, which is before Circuit Judge Bambi Weil, is now in its second month.
Yesterday, Weil also heard testimony from a Kamehameha Schools librarian who opposed the estate's $422,000 purchase of a collection of Hawaiiana-related books and photos known as the Van Dyke collection.
Sigrid Southworth said she was shocked to discover that Lindsey initiated the 1996 purchase of the Van Dyke collection, since much of its contents were not useful for the school. As of this date, the collection has not been used by any of Kamehameha Schools teachers or students, Southworth said.
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